Slide 1: Financial Conference for the Results of the Six Months Ended September 30, 2002
FINANCIAL CONFERENCE FOR THE RESULTS OF THE SIX MONTHS ENDED SEPTEMBER 30, 2002 AND FORECASTS FOR THE YEAR ENDING MARCH 31, 2003 Seiichi Asaka President & CEO November 19, 2002 NSK Ltd. Cautionary Statements with Respect to Forward-Looking Statements Statements made in this report with respect to pl
Slide 2: Contents
Contents MOTION & CONTROL Business Results for the Six Months 3 ~ 19 Ended September 30, 2002 Forecasts For The Year Ending 20 ~ 25 March 31, 2003 Progress report on the 2nd Phase of the 26 ~ 30 “NSK Business Restructuring Program” 2 The following is an outline of our business results for the six mo
Slide 3: Business Results for the Six Months Ended September 30, 2002
Business Results for the Six Months Ended September 30, 2002 MOTION & CONTROL 3 3
Slide 4: Summary of the Interim Business Results for FY 2002
Summary of the Interim Business Results for FY 2002 MOTION & CONTROL *Profit and loss items are compared with the same period last year. Balance sheet items are compared with year-end data for FY 2001. (Six months ended Sep. 30, ‘01) (Six months ended Mar. 31, ‘02) (Six months ended Sep. 30, ‘02) (¥
Slide 5: Changes in the Scope of Consolidation
Changes in the Scope of Consolidation MOTION & CONTROL (1) Changes in the scope of consolidated subsidiaries (74 companies 73 companies) < Decrease > • Aeroengine Bearings UK Ltd. Transferred to the scope of affiliates accounted for under the equity method due to a change in equity. (100% 24.99%) (2
Slide 6: Consolidated net sales – By customer location
Consolidated net sales –By customer location– location– MOTION & CONTROL (Six months ended (Six months ended Increase/ Upper: Effect of FOREX Net increase/ Sep. 30, 2001) Sep. 30, 2002) Lower: Effect of exclusion of (¥100 million) FY ’01:1st half FY ’02:1st half (decrease) Aerospace Bearings UK (dec
Slide 7: Consolidated net sales – By business segment
Consolidated net sales –By business segment– segment– MOTION & CONTROL (Six months ended (Six months ended Increase/ Upper: Effect of FOREX Net increase/ Sep. 30, 2001) Sep. 30, 2002) Lower: Effect of exclusion of (¥100 million) FY ’01:1st half FY ’02:1st half (decrease) Aerospace Bearings UK (decre
Slide 8: Consolidated business results – By geographical segment
Consolidated business results –By geographical segment– segment– MOTION & CONTROL (Six months ended (Six months ended Increase/ Effect of Net increase/ Sep. 30, 2001) Sep. 30, 2002) (¥100 million) FY ’01:1st half FY ’02:1st half (decrease) FOREX, etc. (decrease) 《Sales》 》 Japan 1,908 1,920 +12 — +12
Slide 9: Operating income: Improvement factors (Japan)
Operating income: Improvement factors (FY ’01:1st half VS FY ’02:1st half) MOTION & CONTROL (¥100 million) FY ‘02: 1st half Japan Labor cost reductions 42 External procurement cost +8 reductions Decline in +17 sales profit ratio +25 25 -17 FY ‘01: 1st half Effect of FOREX Others -7 +8 9-1 In Japan,
Slide 10: Consolidated business results – By company location
Consolidated business results –By company location– location– MOTION & CONTROL (Six months ended (Six months ended Increase/ Effect of Net increase/ Sep. 30, 2001) Sep. 30, 2002) (¥100 million) FY ’01:1st half FY ’02:1st half (decrease) FOREX, etc. (decrease) 《Sales》 》 Japan 1,908 1,920 +12 — +12 (+
Slide 11: Operating income: Improvement factors (Europe)
Operating income: Improvement factors (FY ‘01:1st half VS FY ‘02:1st half) MOTION & CONTROL (¥100 million) Europe FY ‘02: 1st half Benefits from business Others -10 restructuring activities +3 +8 Decrease in Net improvement: production volume +10 +17 -18 -16 Price increases FY ‘01: 1st half +6 9-2 T
Slide 12: Consolidated business results – By company location
Consolidated business results –By company location– location– MOTION & CONTROL (Six months ended (Six months ended Increase/ Effect of Net increase/ Sep. 30, 2001) Sep. 30, 2002) (¥100 million) FY ’01:1st half FY ’02:1st half (decrease) FOREX, etc. (decrease) 《Sales》 》 Japan 1,908 1,920 +12 — +12 (+
Slide 13: Consolidated business results – By business segment
Consolidated business results –By business segment– segment– MOTION & CONTROL (Six months ended (Six months ended (Six months ended Increase/ Effect of Net increase/ Sep. 30, 2001) Mar. 31, 2002) Sep. 30, 2002) (¥100 million) FY ’01:1st half FY ’01:2nd half FY ’02:1st half (decrease) FOREX, etc. (de
Slide 14: Consolidated non-operating income and losses
Consolidated non-operating income and losses MOTION & CONTROL (Six months ended (Six months ended (Six months ended Sep. 30, 2001) Mar. 31, 2002) Sep. 30, 2002) (¥100 million) FY ’01:1st half FY ’01:2nd half FY ’02:1st half Y.O.Y Operating income 49 -10 65 +16 Non-operating income 37 39 40 +3 Intere
Slide 15: Consolidated extraordinary income and losses
Consolidated extraordinary income and losses MOTION & CONTROL (Six months ended (Six months ended (Six months ended Sep. 30, 2001) Mar. 31, 2002) Sep. 30, 2002) (¥100 million) FY ’01:1st half FY ’01:2nd half FY ’02:1st half Y.O.Y Ordinary income 20 -52 32 +12 Extraordinary income 95 1 150 +55 Gain o
Slide 16: Consolidated net income
Consolidated net income MOTION & CONTROL (¥100 million) Income before tax 150 97 100 Net income 75 50 37 8 0 -50 -100 -150 -200 -200 -214 -250 (¥100 million) Six months ended Sep. 30, 2001 Six months ended Mar. 31, 2002 Six months ended Sep. 30, 2002 FY ’01:1st half FY ’01:2nd half FY ’02:1st half N
Slide 17: Consolidated balance sheets
Consolidated balance sheets MOTION & CONTROL (Six months ended (Six months ended (Six months ended Difference Sep. 30, 2001) Mar. 31, 2002) Sep. 30, 2002) from the (¥100 million) FY ’01:1st half FY ’01:2nd half FY ’02:1st half half-year Current assets 3,058 2,915 2,758 -157 Cash and deposits 214 245
Slide 18: Consolidated inventories
Consolidated inventories MOTION & CONTROL (Six months ended (Six months ended (Six months ended Excluding Y.O.Y Sep. 30, 2001 Mar. 31, 2002) Sep. 30, 2002) Y.O.Y effect in local FY ’01:1st half FY ’01:2nd half FY ’02:1st half of FOREX currencies (¥100 million) Japan 499 454 409 -45 -45 <Non- 281 268
Slide 19: Consolidated capital expenditures
Consolidated capital expenditures MOTION & CONTROL (Six months ended (Six months ended (Six months ended (Six months ending Sep. 30, 2001 Mar. 31, 2002) Sep. 30, 2002) Mar. 31, 2002) FY ’01:1st half FY ’01:2nd half FY ’02:1st half FY ’02:2nd half (¥100 million) <Forecast> Total capital 209 153 132 1
Slide 20: Consolidated balance sheets
Consolidated balance sheets MOTION & CONTROL (Six months ended (Six months ended (Six months ended Difference from Sep. 30, 2001) Mar. 31, 2002) Sep. 30, 2002) the previous (¥100 million) FY ’01:1st half FY ’01:2nd half FY ’02:1st half half-year Current liabilities 2,591 2,394 2,314 -80 Notes and ac
Slide 21: Consolidated interest bearing debts
Consolidated interest bearing debts MOTION & CONTROL (¥100 million) D/E ratio 1.31 1.43 1.21 1.08 2,724 2,614 2,558 2,458 556 554 518 Overseas 403 2,168 2,060 2,055 2,040 Japan FY 1999 (Year-end) FY 2000 (Year-end) FY 2001 (Year-end) FY(Interim) 2002 18 Interest-bearing debts decreased 16.6 billion
Slide 22: Cash flow (FY 2002: 1st half)
Consolidated cash flow (FY 2002: 1st half) MOTION & CONTROL (Excluding the effect of exchange rate fluctuations) （¥100 million） ） (1) Cash flow provided by (2) Cash flow used in (3) Cash flow used in Operating activities +198 Investing activities -81 Financing activities -182 Depreciation Cash decre
Slide 23: Forecasts for the Year Ending March 31, 2003
Forecasts for the Year Ending March 31, 2003 MOTION & CONTROL 20 Now, we will move onto the forecasts for the full year ending March 31, 2003. 23
Slide 24: Consolidated business forecasts for the year ending March 31, 2003
Consolidated business forecasts for the year ending March 31, 2003 MOTION & CONTROL Year ended Year ending March 31, 2002 March 31, 2003 FY 2001 FY 2002 Y.O.Y (¥100 million) <Actual> <Actual> <Actual> <Actual> <Forecast> <Forecast> 1st half 2nd half Total 1st half 2nd half Total Net sales 2,524 2,28
Slide 25: Consolidated net sales forecast – By customer location
Consolidated net sales forecast –By customer location– location– MOTION & CONTROL Year ended Year ending March 31, 2002 March 31, 2003 (¥100 million) FY 2001 FY 2002 Y.O.Y (%) <Actual> <Actual> <Actual> <Actual> <Forecast> <Forecast> 1st half 2nd half Total 1st half 2nd half Total Total 2,524 2,285
Slide 26: Consolidated net sales forecast – By business segment
Consolidated net sales forecast –By business segment– segment– MOTION & CONTROL Year ended Year ending March 31, 2002 March 31, 2003 (¥100 million) FY 2001 FY 2002 Y.O.Y (%) <Actual> <Actual> <Actual> <Actual> <Forecast> <Forecast> 1st half 2nd half Total 1st half 2nd half Total Total 2,524 2,285 4,
Slide 27: Consolidated net sales forecast – By geographical segment
Consolidated net sales forecast –By geographical segment– segment– MOTION & CONTROL Year ended March 31, 2002 Year ending March 31, 2003 FY 2001 FY 2002 (¥100 million) <Actual> <Actual> <Actual> <Actual> <Forecast> <Forecast> 1st half 2nd half Total 1st half 2nd half Total Sales 1,908 1,759 3,667 1,
Slide 28: Progress report on the 2nd Phase of the NSK Business Restructuring Program
Progress report on the 2nd Phase of the “NSK Business Restructuring Program” MOTION & CONTROL 25 The next few slides will explain the current status of the 2nd phase of the “NSK Business Restructuring Program,” the major topic faced by the company today. 28
Slide 29: Progress summary of the 2nd phase of the NSK Business Restructuring Program
Progress summary of the 2nd phase of the “NSK Business Restructuring Program” MOTION & CONTROL Current status Future developments 1. Domestic wage and •End of Sep. ’02: ¥ -6.9 billion • Review current wage and employment reforms • End of Mar. ’03: ¥ -7.6 billion employment structure Achieve the targ
Slide 30: Reduction of External Procurement Costs
(Reference) Reduction of External Procurement Costs MOTION & CONTROL (1) Reduction of external procurement costs by 15% +α over 3 years (Japan) • Reduction of suppliers from 900 companies to 801 (¥ billion) (End of Sep. ’02) Full-year cost reduction benefits 12 calculated at the end of year 25.0% •
Slide 31: Progress summary of the 2nd phase of the NSK Business Restructuring Program
Progress summary of the 2nd phase of the “NSK Business Restructuring Program” MOTION & CONTROL Current status Future developments 1. Domestic wage and •End of Sep. ’02: ¥ -6.9 billion • Review current wage and employment reforms • End of Mar. ’03: ¥ -7.6 billion employment structure Achieve the targ
Slide 32: Reorganization of the European Business
(Reference) Reorganization of the European Business MOTION & CONTROL Sales Operating income Automotive components (\ billion) Flat sales forecast (\ billion) business 90 4.0 (3.0%) 80 Automotive components 2.0 70 business 60 0.0 50 -2.0 Bearing 40 business, etc. (-1.9%) 30 Bearing -4.0 business, etc
Slide 33: Progress summary of the 2nd phase of the NSK Business Restructuring Program
Progress summary of the 2nd phase of the “NSK Business Restructuring Program” MOTION & CONTROL Current status Future developments 1. Domestic wage and •End of Sep. ’02: ¥ -6.9 billion • Review current wage and employment reforms • End of Mar. ’03: ¥ -7.6 billion employment structure Achieve the targ
Slide 34: Summary of Results of the 2nd Phase of the NSK Business Restructuring Program
Summary of Results of the 2nd Phase of the “NSK Business Restructuring Program” MOTION & CONTROL — Improvement in profits in comparison to the results of FY 2001 — FY 2002 FY 2003 (¥100 million) Contribution Contribution Additional Total to FY 2002 to FY 2003 contributions contribution profits profi
Slide 35: Other activities
Other activities MOTION & CONTROL (1) Expansion of business in China • Establishment of a holding company in China (‘02) • Establishment of a steering column production base in China (Start of production: Apr. ’04) (2) Strengthen strategic alliances <EA series> <EM series> <EW series> • Establishmen